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By the end of the day, the fourth largest IT company lost a staggering Rs 10,000 crore in market capitalisation as investors reacted sharply and dumped shares, pushing down the scrip by 78 per cent to Rs 39.95 at BSE. The NYSE-listed firm could also face regulator action in the US.
The government, regulator SEBI and the industry reacted with shock and anguish over the turn of events that could tarnish India's corporate and raise vital issue like ethics, corporate governance and accounting and business practices.
Acting in tandem, Corporate Affairs Ministry and SEBI announced that the episode would be probed and action taken against the perpetrators of the fraud that entails inflating profits and creating fictitious assets.
"I am now prepared to subject myself to the laws of the land and face consequences thereof," Raju said in a letter to SEBI and the Board of Directors, while giving details of how the profits were inflated over the years and his failed attempts to "fill the fictitious assets with real ones."
The Maytas firms, although promoted by his family, proved to be his nemesis, with Raju saying: "The aborted Maytas acquisition deal was the last attempt to fill the fictitious assets with real ones... But that was not to be. What followed in the last seven days is common knowledge."
While the government said the entire issue would be referred to the Serious Fraud Investigation Office, SEBI described it as an event of "horrifying magnitude." "It was like riding a tiger not knowing how to get off without being eaten," said Raju.
Removal from Sensex, Nifty
Satyam Computers may be removed from the Sensex and Nifty following the revelation of manipulation in the company's accounts, analysts said. Rajiv Mehta, senior analyst with India Infoline, a large brokerage house said his firm has immediately stopped covering Satyam and many other brokerage houses are also expected to do the same. There will not be any investor interest in the company anyway. The company may be removed from sensex and nifty, he said.
With the fall in its stock prices, Satyam has lost its weightage in the sensex considerably over the recent past and currently has weightage of only 1.56 as of Tuesday. While in nifty, the weightage is only 0.63 per cent.
B Ramalinga Raju can get a 7-year jail term
Satyam Computer Chairman B Ramalinga Raju can face seven years' imprisonment in addition to monetary penalties for forging accounts, breach of trust and misappropriating funds.
"He (Raju) can be charged under various sections of the Indian Penal Code for falsification of accounts, cheating and breach of trust. These offences attract a maximum penalty of seven years," said a senior partner of law firm Titus and Company, Diljeet Titus.
Expressing a similar opinion, senior Supreme Court advocate C A Sundaram said, "If the admissions (made by Raju in his resignation letter) are true, it is a very serious matter. It would be violation of (the) SEBI (code), Company Law and the IPC".
Another senior advocate and corporate law practitioner U K Chaudhary said the Satyam chief could be imprisoned for seven years under various provisions of company law. "Under section 628 of the Companies Act, which deals with misrepresentation of accounts, he could be punished for a maximum of 2 years along with penalty. However, the punishment term could be extended to seven years for producing false affidavits and other documents," he said.
In addition to Raju, Titus said "action should also be taken against Chief Financial Officers, Finance Managers, and Legal and Tax Advisors for their complicity in this episode".
Suggesting that the CBI should get into the case, he said if appropriate action is not taken, the Satyam fiasco would "make a mockery of the Indian enforcement mechanism".
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I agree raju is not innocent .but he is the front man for Y S R and CONGRESS GOV ALL THE MONEY IS SIPHNOED OFF TO THE COFFER OF CONGRESS ELECTION COMITEE . I THINK THE PEOPLE OF AP SHOULD LOOK AT THE BIGGER PICTURE , AP IS THE ONLY STATE CONGRESS HAS TOTAL GRIP ,THIS IS ONLY STATE THEY HAVE THE LIBETY TO STEAL,EMBZZELE FOR THE SAKE OF THERE BELOVED LEADER SONIA AND HER STOOGE DEVIL Y S R WHO HAS RUINED APs progress.IF THEY INVESTIGATE AND FOLLOW THE MONEY TRAIL . IT WILL DEFINITELY LEAD TO STOOGE YSR AND CONGRESS GOV.THE SAME GOV IS ABLE TO TRACK DOWN MONEY WHICH WAS USED FOR MUMBAI BOMB BLASTS ,BUT THEY ARE NOT ABLE TRACK SATYAM.I TOTALLY AGREE WITH MANOJ SATYAM WILL BOUNCE BACK .I CAN BET YOU RAJU IS A VICTIM. THE ANSWER IS Y S R AND CONGRESS HAVE TO BE DEFEATED AND BURIED IN THIS ELECTION, OTHERWISE AP WILL BE LEFT BEHIND FOR GOOD JAI HIND
even though satyam company makes huge fraud, u the people who encourage and want to be a family of satyam company.wat an idiot u r .....may be u not an investor in that one.u too will face the problem........
i belive that satyam corp. will definetly comes out from this consiquences, this is the hard time for orgnisation. but every one should combine to become together,and fight hard , so that to achive the gloden period , i m steel in shock , but no mater ,i come out from this , so the company ,company family, all the staaf , employe , all the share holder ,just have a faith on satyam I m student of mba IT (GRAPHIC REA UNIVERSITY DEHRADUN) STILL HAVE FAITH on satyam , i just want to say that "behind the every dark cloud their is a siliver shining.in future i want to be part of satyam family, all the best
it will also control another corporations to do so. Its current situation effect company' repotation but after some time it will catch its previous position. It have talented employees, and goodwill also. And people have faith on its new board of directors and newly elected CEO Mr. A.S.Murthy. And government also help company to save employees.wait sometime and see the working of company.
Fraud is not new to Raju. (Vanne tho pettina vidya)Infact, he started this in 1980's. He purchased cotton for his spinning mill from guntur cotton parties on credit and no payments were made till now and locked out the mill and started satyam computer services in mid 80s with 7 computers and never look back.Still these cases are pending in guntur jurdiction.I hope now god is happy.
Mumbai/Hyderabad In the country's biggest corporate fraud involving about Rs 8,000 crore, iconic IT company Satyam was hurtling towards disaster following the shocking disclosure of accounts fudging by its founder Ramalinga Raju, who then quit as chairman - leaving an uncertain future for the company and its 53,000 employees. By the end of the day, the fourth largest IT company lost a staggering Rs 10,000 crore in market capitalisation as investors reacted sharply and dumped shares, pushing down the scrip by 78 per cent to Rs 39.95 at BSE. The NYSE-listed firm could also face regulator action in the US. The government, regulator SEBI and the industry reacted with shock and anguish over the turn of events that could tarnish India's corporate and raise vital issue like ethics, corporate governance and accounting and business practices. Acting in tandem, Corporate Affairs Ministry and SEBI announced that the episode would be probed and action taken against the perpetrators of
what have u dne wrong with yhe balancesheets
Raju has committed serious crime in running the corporation. If all corporation runs like this, where would India go? He should be punished severely to protect the innocent people from such act in future.
Only 7 years, No problems... Wht abt the innocent investors?
hi all... what raju did is not an ordinary issue as he is not the only employee of the concern. knowing that there are 53000 employees workinh for it, he can never do that. he must definitely be punished severely fot this action, so that none of the other businessmen will try to do anything. lets pray to god that the people working in satyam get a job in some other good companies.
Hi Raju now suffer for 7 years ,ha ha
No doubt what happened in Satyam is worst we had seen in corporate sector.But, the people making so much noise must ask themselves wheather they had never done such manipulations in their life. Hasn't manipulation at all level has become main management tactis? Raju has not manipulated Balance sheet he got it manipulated and certified by manipulating people working under him,for auditors,for advisory firms
No use of crying over sploit milk. All financial institutions like LIC, ICICI etc should come forward to provide a good management to save investors and employees of Satyam. Satyam still holds asset like more than 50000 skilled employess and projects working on. New management can convince World bank also that now management is new and take the ban back. Government must put Raju behind the bar but also give few projects to Satyam so that everybody connected to Satyam may feel strength. Also guide line should be discussed with Azim Premji, Murti etc to save copany, investors and as well as Indian flag. I must say Satyam will bounce back only support is needed from FIAs and government.
Big New Year Shock,the Satyam shock, the faith in the corporate governance of big companies has eroded putting employees
Manmohan Singh and P. Chidambhram and Raju you all three hang out in public place you all cheated innocent people. Reliance Power cheated people no step taken by P. Chidambhram. Harshad Mehta cheated people that time finance minister was manmohan singh he never take any step against harshad mehta. Now Raju has come please forgive ordinary man you all three are involved in criminal activity now how many people will do suicide but will your government will compensate them now you will compensate only those people who will kill by terrorist but you all white dress terrorist you indirectly kill people now one say in india you should hang out you white color people are making rule in india an ordinary people going die day by day.Weldon big gamblers kas tumhare alaud bhi mar jati to accha hota.Har bar ek ordinary investor and ordinary man hi marta hai.Aur yeh media wale tumhare move par nachte hai.
RTA should be applicable to each
INDIAN processes are most stringent. Accounting is much more conservative than American, British or Australian standards. The Software houses work in much challenging environment than its counterpart in USA, Ireland or Israel. Negative comments are generally from Indians living in USA, UK, Australia ... who feel threatened by the competition. So, these comments are best ignored as it come from a group of "SCARED GUYS" who wants to save their "OVERPAID JOBS" in USA !!!
In retrospect I can say that Sreedharan has been proven right when he said that the award of Bangalore metro to Maytas was scandalous. Many politicaians who asked for an apology should now tender their resignations if they have any personal dignity left in them, with the Satyam Maytas fraud that is now unravelling.
If US can do it, so can India..... If US can have Enron, we can have Satyam. If US can have 9/11, we can have 26/11; if US can have ..... so can India.
All AP IT pros are #1 frauds, they do every unimaginable fraud in USA. Now they are getting back what they did to others!
It is more then Rs 8,000 cr fraud. fraud with employes, fraud with shear holders and fraud with country.now raju will establish a new company somewhere in the world " ASATYAM COPMUTERS LTD."
Please understand that this company created jobs for indians (both in india and abroad) for two decades. Though the issue is very serious, let us not come any conclusion as in the case of aarushi murder case. Let us wait and watch.
Nothing will happen. With his clout with politicians who helped him come up to this level, Raju will go scot free. Has any Businessman been jailed for fraud of this magnitude in India. It will take the judiciary another 2 decades to decide this case by which time Raju will fade from Public memory. In USA the fraudster would be handcuffed and jailed for 30 years.
This fraud could not have been but perpetrated without the Finance Ministry,SEBI Board,RBI and the Banks associated with Company and the Company's Chartered Accountents.It this type of corruption that the UPA Govt and AP Govt and their allies have been invoved from top to bottom. That apart from the Govt and the Politicians involved, the role of SEBI and the Chartered Accountants of the Company. As far as the Chartered Accounts are concered why the Indian Chartered Accountants Have failed to take any action against the Co."s Internal CAs but also the Statutory CAs for suppressing the action againsgtg them! The entire disiplanry committee members only trakeaction against small people in the name of maitainingn then so called purity of their alleged August B ody when the big fish are allowed to by>The of this body should be emquried into any tgheir be made public.The entire Society has been corrupted by the UPA Govt who has only collected totally corrupt people as Nehru and his heirs
Pricewater house must be banned all over the world- pricewater House-Shareholders- always look at the reliable audit of the company. If they cannot do their job they must be punished. In Enron case also the auditors were to close down.
With gurus like the central ministers and netas, who do exactly the same thing with the public money and get away with it, CEO should not worry too much. I am certain that CEO will go to jail for a day or two and then on some technicality, will get off. The surprising thing is that for a fraud like this, the maximum sentence is only 7 years!!!!